THE EVOLVING ROLE OF SUB-NATIONAL ACTORS IN INTERNATIONAL ECONOMIC REGULATIONS: LESSONS FROM THE CANADA-EU CETA (Paper delivered at the 6th SIEL/PEPA Conference, Tilburg, Netherlands, 20-21 April 2017).

There are divergent opinions regarding the new wave of mega-regional economic agreements sweeping the world. In a positive sense, recent mega-regional agreements such as the Trans-Atlantic Trade and Investment Partnership (TTIP) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA) are arguably trailblazers in regional economic integration, much like NAFTA was more than two decades ago. Criticisms have, however, been levelled against these agreements. Notably, there is a perceived lack of accountability/transparency during the negotiation of these deals, and uncertainty about their potential economic benefits relative to the problems. Moreover, because of the broad scope and far-reaching effects of these mega-regional economic agreements, sub-national and non-state actors (especially civil societies) around the world are becoming increasingly concerned about their impact on critical aspects of their respective home economies. These concerns are clearly more heightened from the perspective of sub-national actors in federal systems. This is mainly because federal systems by their very nature have a delicate power balance, which is being tested by the ever-increasing encroachment of international economic disciplines into the jurisdictional competence and interests of sub-national governments. With respect to CETA, after over 7 years of painstaking negotiations, Wallonia, a sub-national region in Belgium, almost derailed the entire process when it opposed the national ratification of CETA. This recent development brings to the fore the growing significance of sub-national actors as involved actors in world economic governance. Using the CETA as a case study, this paper aims to assess the nature, scope, and implications of shifting forms of cooperation observable in the design of newly styled Free Trade Agreements emerging in the world trade and investment system. This paper will critically evaluate how differences in the legal frameworks and institutional designs for international economic relations in Canada and the EU, respectively, have affected the outcome of CETA. The analysis will also focus on the different strategies adopted by Canada and the EU to engage their sub-national governments in the CETA negotiation process, and on their implications for future mega-regional trade agreements.